The price of insulin became an unexpected focal point in a Congressional hearing about possible price-gouging by a defense contractor.
During a House Oversight Committee hearing, Congresswoman Alexandria Ocasio-Cortez (D-NY) quantified in vials of insulin the amount of money that TransDigm charges the government for a small airplane part. She suggests in her line of questioning to a TransDigm executive that the government could pay for single-payer health care by curbing price-gouging by military contractors.
“We’re told constantly, ‘How are you going to pay for it? How are you going to pay for the insulin costs of everyday Americans?” Congresswoman Ocasio-Cortez said. “And I seem to have found my answer here today.”
According to the congresswoman, TransDigm sold to the government 149 three-inch non-vehicular clutch disks for $215,007, a profit of 4436% on the cost of making the part. She then states that the cost of a vial of insulin is $137, seemingly referencing the list price for insulin lispro, the generic version of Lilly’s Humalog.
“I could have gotten over 1,500 people insulin for the cost of the margin for your price gouging for these vehicular disks alone,” she says, calculating for a single vial of insulin per person. She later adds, “Why should we give you another dime?”
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TransDigm Executive Chairman Walter Nick Howley, perhaps wisely, did not discuss his company’s contract with the Department of Defense in terms of insulin vials. Instead, he attempted to put the price charged for the military part in context of the total value his company provides the government.
The hearing was in response to a report by the Department of Defense inspector general that found TransDigm may have made excessive profits on 98 out of 100 parts that were sampled by regulators.